Funding Circle may indeed have a horn

By Rupert Taylor on 25th June 2015

P2P/Marketplace Lending

Funding Circle has thus far reacted with graceful discretion to numerous reports, all un-substantiated, that the company has achieved the coveted ‘Unicorn’ status – Silicon Valley speak for a private tech company valued at more than $1 billion.  Ever since the company completed a $150m funding round in April of this year speculation has pointed to a total value of upwards of $1 billion.  At the time the number was impossible to prove and the company neither confirmed nor denied. 

Funding Circle may indeed have a horn

Marketplace lending participants will however be interested to note that information to support, or at least strongly indicate, a $1billion plus valuation for Funding Circle is now readily accessible online.  Companies House has recently launched a beta site that allows users to access all UK company filings free of charge. 

The filings for Funding Circle confirm that in the 17th April equity round 285,749 shares were allocated at a price of £345.36 per share.  This equates to a raise of £98,686,274.64 or a little over $149,000,000 at the prevailing exchange rate.  The associated statement of capital lists a total number of shares in issue, including the latest round, of 2,227,703.  Applying the price of the latest round to the total number of shares in issue gives a company valuation of £769,359,508.08 which in $ terms equates to comfortably more than $1,100,000,000. 

Here at AltFi we are at pains to highlight to Crowdfunding investors that they should seek to own the same class of shares as management and this does not appear to be the case in this instance.  There are both ordinary shares and preference shares in issue and we cannot be sure that all classes carry the same rights.  Indeed it appears that management overwhelmingly own the ordinary shares and preference shares have been issued in the subsequent rounds to investors.  One would imagine that any difference in rights attributable to the ordinary shares makes them at least as valuable as the preference shares albeit we can’t be certain of this.  However, assuming that the price of the shares issued in the latest round is a good approximation for the value of all shares in issue then AltFi is delighted to confirm that Funding Circle is indeed a Unicorn. 

We recognize that this approach is not as perfect as the up to date assessment of a company’s valuation that quoted markets can provide, where even appropriate premia/discounts for different share classes are factored in.  That said, whilst recognising the imperfections of this methodology we can also use this same approach to track the approximate progress of the Funding Circle valuation.  Using Companies House data to apply the price of each successive equity raise to the new number of shares in issue we can watch the valuation evolve from £8,500,000 in March 2011, through to the $1bn+ valuation today.  This illustrates the impressive journey from startup to Unicorn in just 5 years. 

Readers can see the detail for themselves on the Companies House Beta site here.

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